Strength of numbers in Senate points to a bumper budget

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A landmark federal budget looms in May next year as the Howard
Government revamps its economic reform agenda to make the most of
its improved numbers in the Senate.

The swag of big-spending policies announced during the election
campaign, and the opportunity to implement reforms that would have
previously been rejected by the Senate, points to a bumper 2005-06
budget.

In the past, the Government has used the budget to make major
announcements - including tax changes, welfare reforms and measures
to deal with the ageing population - so next year's budget provides
an opportunity for the Coalition to showcase its plans for its
fourth term.

It is also possible the Government may opt for a special
economic statement before the budget to provide policy details on
its proposed future fund for Commonwealth surpluses and what it
will do with Telstra sale proceeds.

However, the full budget in May, on which the Treasurer, Peter
Costello, says he will start working in the next few weeks, is the
most likely time for the Government to spell out significant new
reforms.

"In the past, the Government has shown a desire to incorporate
broader policy changes in the framework of the budget," he
said.

"Moreover, with Peter Costello keen to broaden his policy
horizon, it is reasonable to expect that the budget will assume
greater significance as a vehicle for pursuing the Government's
socio-economic policy agenda."

The Coalition appears to have won at least half the seats in the
Senate and has a chance to pick up one additional senator, which
would allow it to pass all budget legislation without
modification.

The new Senate numbers will apply from July 1 next year, not
long after the next budget, expected on May 10.

Mr Gibbs said the Government's improved numbers in the Senate
gave it a historic reform opportunity.

"I really wouldn't like to see them sitting there for three
years just housekeeping now," he said. "That would be a terrible
waste."

The Prime Minister, John Howard, has anointed Mr Costello as his
likely successor, and the budget provides him with another
opportunity to broaden his policy range and advance his claims for
the top job.